An ecosystem services approach to natural resource and environmental economics

This chapter provides an overview of the ecosystem services approach to natural resource and environmental economics, emphasizing concepts, theory and methods, along with tips and examples for instructors. Although the chapter highlights the fundamentally interdisciplinary nature of ecosystem services analysis, it retains a focus on ecosystem services as related to the study of economics. The chapter begins with an overview of the ecosystem services paradigm. This is followed by a discussion of key components in ecosystem services analysis, including causal chains, ecosystem service definitions, and production functions (biophysical and economic) necessary to quantify ecosystem services provision and value. These sections emphasize aspects of ecosystem services analysis that differ from those in other areas of economics. The chapter concludes with a review of ecosystem services valuation, again focusing on the dimensions that distinguish ecosystem services value estimation from other types of market and non-market valuation.